CIN : U85110KA1980SGC003871

TJM)e-~TJ ~tlla~. ~~ ~~e-TJ Ncm~~ (6m~~ ~~e-dd ~~ e..eo!~~d)

Karnataka Soaps & Detergents Limited (A Government of Karnataka Undertaking)

KSDLIHRD/59[C]-A/2018-19/ 31 Date:07 .04.2018

This is to certify that Ms.Radhika.M.R,Student ofMBA,USN:lAY16MBA54,

of Acharya Institute of Technology,Acharya Dr.Sarvepalli Radha Krishna Road,

Soldavanahalli, Bengaluru-560 090. Affiliated to Visveswaraya Technological

University, Belagavi, has done Project work "A Study on Inventory

Management" at Karnataka Soaps & Detergents Limited, Bengaluru-560 055 ,

from:16.01.2018 to 24.03.2018.

During her Project work in our Company, we found her Character & Conduct is

Good.

We wish her success in Life and Career. ~~v,htt ASST.GENERAL MANWGffi [Human Resource & Development]

Karnataka Soaps t~ D:·tcq;c:its Limited

E-'i\:~nutl 1 u r:!-Pu nP hi~ ::-..J.J:: y. R<Jjajinag:::r, Ben:J~l!L!ru-560 055

(:Sci~ !~~o ~:33 ~~rn : c;jo.27, ~m::~],o:bO" ;::if.l£:l'F", ejo~Mcb-o;l)~ <5~o. ov23tl~c;j~d. ejo~Mcb-560 055, t;rcJd3

<::ir.>d;;;.)~ : • 0c:1mF"<S : 080-2216 4800 • ~~ d~3 5o : 1800 425 1103 • ~6C::. : 080-2337 0498 1 2337 5102 • !.30~6C::. : 2337 7691 Corporate Off. & Factory: #27, lndustnal Suburb, Bangalore-Pune, Highway, Rajajinagar, Bangalore- 560 055. INDIA

Ph : • Factory : 080-2216 4800 • Toll Free 1800 425 1103 • Fax : 080-2337 0498 1 2337 5102 • Telefax : 2337 7691 Website : http:IJwww.mysoresandal.co.in

..... , .. _, ,.

ACHARYA INSTITUTE OF TECHNOLOGY

(Affiliated to Visvesvaraya Technological University, Belagavi, Approved byAICTE, New Delhi and Accredited byNBA and NAAC)

Date: 17/05/2018

CERTIFICATE

This is to certify that Ms. Radhika M R bearing USN 1AY16MBA54 is

a bonafide student of Master of Business Administration course of the

Institute 2016-18 batch, affiliated to Visvesvaraya Technological University,

Belgaum. Project report on 11A Study on Inventory Management" at

Karnataka Soaps & Detergents Ltd Bangalore is prepared by her under the

guidance of Prof. Mallika B K, in partial fulfillment of the requirements for

the award of the degree of Master of Business Administration, Visvesvaraya

Technological University, Belgaum, Karnataka.

1: '~ ~~~ "I ~ ~-rlSlg

Signature of Internal Guide Signa~H~e~~~ent Heaa-ot t , f MBA

"

Oepart':'ent o Techno\og_ \ charya los~'tuta o~\ore-560 10,

.;0\devanah\\-it aa.g ~~'-~

SignftHHCf?/cRrincipal

Acharya Institute of Technology Soladevanahalli, Bangalore-560 1 G7

Acharya Dr. Sarvepalli Radhakrishnan Road, Soladevanahalli , Acharya PO., Bangalore 560 107, Karnataka, India • www.acharya.ac.in/ait/ • Ph +91-80-225 555 55 Extn. : 2102 • Fax: +91-80-237 002 42 • E-mail: principalait@acharya.ac.m _

..... ....

DECLARATION

I Radhika MR, hereby declare that the project report entitled "A study on

inventory management at "Kamataka Soaps and Detergents Limited,

Bengaluru" prepared by me under the guidance of Assistant Prof. Mallika B K,

faculty of MBA Department, Acharya Institutes of Technology and external

assistance by Mr. G Ravi, Accounts manager at Kamataka soaps and Detergents

Limited.

I also declare that this project work is towards the partial fulfilment of the

university regulations for the award of degree of Master of Business

Administration by Visvesvaraya Technological University, Belgaum.

I have undergone a summer project for a period of Ten weeks. I further declare

that this project is based on the original study undertaken by me and has not

been submitted for the award of any degree/diploma from any other

university/institution.

Date: Dtt; ~~'i .2..01 & Place:~~~

~~~ Signature of the student

Acknowledgement

I am truly grateful to my external guide Mr. G Ravi, Accounts manager and my

internal guide Assistant Prof. Mallika B K, for their research guidance

encouragement, and opportunities provided.

I wish to thank all the respondents from the firms who spent their valuable time in

discussing with me and giving valuable data.

I deem it a privilege to thank our principal Dr. Sharanabasava Pilli, Dr. Mahesh,

Dean Academics and our HOD Dr. Nijaguna for having given me the opportunity

to do the project, which has been a very valuable learning experience.

My sincere and heartfelt thanks to all my teachers at the Department of MBA,

Acharya Institute of Technology for their valuable support and guidance.

Last, but not least, I want to express my deep appreciation to my parents for their

unstinted support.

TABLE OF CONTENTS

Chapter no Titles Page.no

Executive Summary

Chapter no.1

1.1

1.2

1.3

1.3.1

1.3.2

1.3.3

1.3.4

1.4

1.5

1.6

1.7

Introduction

Introduction

Industry profile

Company profile

Vision, Mission & Quality policy

Product Profile

Areas of operation

Infrastructure facilities

Competitors information

SWOT Analysis

Future growth and prospects

Financial Statement

2-19

Chapter no.2

2.1

2.2

Conceptual Background & Literature Review

Theoretical Background of the study

Literature Review with research gap

20-33

Chapter no.3

3.1

3.2

3.3

3.4

3.5

3.6

Research Design

Statement of the problem

Need of the study

Objectives

Scope of the Study

Research methodology

Hypothesis

34-37

3.7 Limitations

Chapter Scheme

Chapter no.4 Analysis and Interpretation 38-55

Chapter no.5

5.1

5.2

5.3

Summary of Findings, Conclusions &

Suggestions

Findings

Conclusions

Suggestions/Recommendations

56-57

Bibliography

Annexure

LIST OF TABLES

Table. No Titles

1 Percentage Growth of Inventory

2 Profit Before Tax and Profit After Tax

3 Percentage of Inventory to Working Capital

4 Percentage of Inventory in Current Assets

5 Percentage of Inventory to Turnover

6 Percentage of Inventory to Raw Material Turnover Ratios

7 Inventory Conversion of Period

8 Work in Progress Inventory Turnover Ratio

9 Finished Goods Turnover Ratio

LIST OF GRAPHS

Table. No Titles

1 Percentage Growth of Inventory

2 Profit Before Tax and Profit After Tax

3 Percentage of Inventory to Working Capital

4 Percentage of Inventory in Current Assets

5 Percentage of Inventory to Turnover

6 Percentage of Inventory to Raw Material Turnover Ratios

7 Inventory Conversion of Period

8 Work in Progress Inventory Turnover Ratio

9 Finished Goods Turnover Ratio

Executive Summary

The project involves the manufacturing inventory management procedure. It includes a

simple advent to inventory management, agency profiles, industry profile, product profile,

visions, missions and KSDL regulations.

It also explains the employer's destiny boom and prospectus. There are some sorts,

technology and objectives of inventory management to explain. The literature evaluation

discussed the employer's inventory guidelines and manipulate measures in detail.

The equipment used in this model are ratio analysis and interpretation. Use time collection

analysis to observe the efficiency of stock management. The project additionally proposed a

future movement plan for the organization to enhance inventory.

In order to analyze a study on inventory management in Karnataka Soaps and Detergent

limited, five years financial data has been measured.

1

1.1 Introduction

Inventory is the maximum vital asset owned by way of maximum organizations due to the

fact stock turnover approach one of the primary assets of earnings and next profits for the

agency’s shareholders. The end is that better coordination among the shopping, advertising,

production and finance departments will help to gain the performance of stock control.

Inventory is held through the manufacturer or employer for future use or sale. Inventories

include raw substances, packaging substances, standard stores and elements, device spare

components, parts bought or manufactured for inventory, work-in-system and completed

products. Inventory management refers to the time period material that is frequently utilized

in production worries and refers back to the uncooked materials used to supply subassemblies

and make parts. The phrases materials and stores can be used interchangeably. Inventory is

the second largest asset elegance for production groups, 2nd only to plants and equipment.

The proportion of stock is necessary to keep away from large losses because of leakage, theft

and waste. Holding inventory prices for inventory relationships, stock management will

minimize stock charges. Changes in inventory will even have an effect on the internet

working capital level of the organization and the working fees of stock management. These

running costs are the end result of storage, coverage, transportation, scrap, waste and stock

deterioration.

1.2 Industry Overview

The complete soap enterprise is experiencing adjustments due to the innumerable values of

the authorities, inclusive of environmental and strength troubles, which increase raw cloth

charges.

The ever-converting technologies and the desire of people and organizations to provide

satisfactory merchandise at more economic speeds have additionally been used as a catalyst

for dynamic change procedures. More and greater cleaning soap makers are looking to seize

market share through introducing and retaining desirable merchandise. The Indian cleaning

soap industry faces excessive market competition, whilst multinational corporations dominate

2

the marketplace. Especially all through 1991-1992, they also confronted an extreme chance

from the dynamic and enterprising new entrance. If we appearance returned on the history of

soaps and detergents, people knew soap nearly 2,000 years ago, that is, whilst Mr. Elder by

accident observed cleaning soap in AD 70, while roast meat flowed inside the ashes. The

block of this type of product is cleaning soap, which has the characteristics of foaming and

cleaning. In 1192, the primary industrial lot of soap was made and sold with the aid of the

London m/s Bristol soap market place. From 1662 AD, the primary soap-making patent

changed into filmed in London. It is stated that the cleaning soap shop in 1884 fed on 20,000

heaps in the world.

The Records of Soap

Soap manufacturing started in North America. The names of a few well-known American

corporations began 200 years ago. During middle age, soaps are synthetic in exclusive parts

of Italy, France, Britain and different nations. France have become famous and installed

many small factories there.

In India, the first cleaning soap enterprise become established by way of the Northwest Soap

Company in 1897 after Meerat observed Swadeshi. From 1905, almost no greater factories

were installed.

They may be:

Mysore Soap Factory in Bangalore

Godrej Soap in Mumbai

Bengal Chemicals

Tata Oil Factory

Leverage Brothers in 1930

3

The Indian cleaning soap industry situation

The Indian soap enterprise has been dominated through a few corporations

Hindustan Lever Co., Ltd.

Tata Oil Factory

Godrej Soap Private Limited

The maximum current contestants consist of Colgate-Palmolive Ltd.

Proctor & Gamble Ltd.,

Nirma Soap Factory,

Wipro Ltd.,

The Indian cleaning soap industry persisted to thrive until 1967-98, but it began to stagnate. It

quickly started out to recover, and experienced a short growth in 1974. This increase in call

for may be attributed to:-

Populace growth

Increased earnings and consumption.

Speed up the manner of urbanization

The increase of private hygiene.

Soap makers are divided into organized and unorganized sectors. KSDL is in an organized

branch.

Market state of affairs

India is a great market for cleansing merchandise. The U.S.’s consistent with capita detergent

and bar consumption is 1.6 kg and cleaning soap is 543 grams. Hindustan’s levers usher in

the cleansing business and the sale of the cleansing commercial enterprise, but behind the

settlement.

In August 2004, India's annual 7.4lakh tones soap marketplace rose more than 4%. The wish

is to boom the value of the rupee due to the fact the Indian marketplace is basically a pseudo-

cleaning soap, and it is very complicated, so its ability is high, no longer best based totally on

the advantages of fee, but also consists of a sequence of emotions inside the framework.

4

1.3 Company Profile

India is the rich land of forests, ivory, silk and sandals; valuable gemstones are the charm of

magic for hundreds of years. The maximum charming fragrance within the global has been

unusual with sandals. The richest sandalwood sources within the international come from an

impartial wooded area in southern India, Karnataka

The origins of Sandalwood and its crude oil used inside the manufacture of Mysore sandal

soaps in Karnataka are well known, because the Indian perfume ambassadors and

sandalwood oil are virtually known as “liquid gold”.

Inspired via Her Majesty Maharaja, Late Jayachamarajendra Wadiyar exported sandalwood

logs to Europe and new destinations, but because the First World War in India, the

sandalwood commercial enterprise changed into facing a critical disaster.

This situation brought about the birth of an industry that produced price-added products,

particularly: sandalwood oil. His Maharaja, Mysore’s Royal Highness, created the possibility

by way of seeding the authorities Sandalwood Oil Factory, which is now the KS&DL. The

assignment has top engineering competencies and understanding. Late Mr. M. Visveswaraya,

the great engineer, became in the back of the task.

The reputation of cutting-edge famous Mysore Sandalwood soap comes from Sri Sosale

Garalapuri Shastry, who makes use of sandalwood oil for soap making. He is a distinguished

scientist in the discipline of labor on the Tata Institute in Bangalore. He was dispatched to

Britain to master the first-class aspects Soap manufacturing.

Lord of Mysore and Divan. M. Visveswaraya installed a government cleaning soap factory in

1918. The plant started out manufacturing close to K.R.Circle in Bangalore with a capacity of

a hundred tons of PA. In November 1918, Mysore sandal soap made a sincere attempt and

experiment to enter the market for soap evolution.

5

The manufacturing facility covers a place of 39 acres (masking the Soap, Detergents and

Fatty Acids Division) vicinity at the Bangalore-Pune Highway and may be effortlessly

reached through transportation offerings and communications. Another sandalwood oil area

turned into set up in 1994 in Shimoga, Due to loss of sandalwood, it stopped its business in

2000.

The manufacturing unit began in a modest scale in 1916. The first product changed into soap

washes similarly to soap in 1918. The business enterprise's cleaning soap is made from

sandalwood oil. In 1950, the authorities decided to amplify the primary section of the

enlargement of the manufacturing facility to boom production to 700 heaps according to yr.

and entire it in an old constructing in 1952.

The next segment of growth carried out in 1954 became to meet the developing demand for

Mysore to this quit, the Indian government has permitted the production of 1500 tons of soap

and seventy five tons of glycerin each yr. The Rs. 2,10,000 rupee enlargement challenge

included the switch of the manufacturing facility to a newly finished business suburb in

Bangalore.

The manufacturing facility started operating on July 1st, 1957 below this new premise (the

present day one). From the start of this 12 months to the manufacturing unit, we have never

seemed lower back. It has achieved boom and development of production scale and income.

The industry has two divisions in Shimoga and Mysore respectively, one is the department

that extracts sandalwood oil. The Mysore branch started working in 1917 and it became only

in 1984 that it began to fabricate aromas and agar of desired excellent. From the primary log

of sandalwood in 1916 rolled into the boiler room, the organization has been striving for

excellence. The task underneath the leadership of Mr. Sir fashioned the engineering

competencies and knowledge with pinnacle-level teams. M. Visveshwaraya, Prof. Watson

and Dr. Sudbrough. Just like a small unit at the start of this cleaning soap plant, it has now

grown to a big scale.

6

The Founder of Mysore Sandal Soap

The authorities Sandalwood Oil Factory changed into set up via Maharaja Mysore. In Mysore

in 1916, Nalwadi Krishna Raja Wodeyar and Diwan Sir, Mr. Visvesvaraya extracted

sandalwood oil from sandalwood. Lord Mysore is eager to promote Mysore’s launch of “The

WORDL's Best Natural Liangshan Oil” on the global map, and regards it as “the Indian

cigarette ambassador”. Under the management of Prof. Suddourough and Prof. Watson, the

first test to extract sandalwood oil from Sandalwood was performed on the Bangalore

Institute of Science in India. The British Pharmacopoeia's extremely good sandalwood oil

turned into imported from the Mysore authorities soap manufacturing facility.

In 1918, a rare present bag made from sandalwood oil produced with the aid of a foreign

visitor to my U.S. Became dispatched to His Majesty the Maharajas. This caused the idea of

making cleaning soap from existing natural sandalwood oil in Mysore’s hometown. Sri SG

Shastry is a qualified commercial chemist who changed into sent to London to acquire

superior schooling on soap and perfume generation. As SG Shastry lower back from London,

the Mysore sandalwood era began. Sri SSG Shastry’s first neighborhood SANDAL cleaning

soap primarily based on Sandal Note based spices and different natural crucial oils (along

with Vetivert, Patchouli, Geranium, Palm Rosa, Orange, Petitgrain, and many others.) has

been marketed under the emblem call MYSORE 1918 SANDAL SOAP.

The birth of the legend:

At the beginning of the 20th century, a magical formula was born. This formula is made from

the best and purest sandalwood oil. It is called "liquid gold" and it is exclusively in our state

of Karnataka - Mysore. The distillation of the department. An aromatic gift from the First

Government of India soap factory to the world. This unique soap was bred by King Mysore

and is full of all the advantages of natural sandalwood oil. This unique soap captures the heart

and the market at home and the rights around the world, creating a fragrance for Karnataka.

Heritage. Karnataka Soap and Detergent Co., Ltd. (KS&DL) is the true successor to this

golden heritage of India. KS&DL has inherited a tradition of excellence for more than 80

years, using only the highest grade sandalwood oils in its product line. Today KS&DL has

become one of the world's largest producers of sandalwood oil and sandalwood soap.

7

Rename:

KARNATAKA SOAPS&DETERGENTS LTD

(A GOVT. KARNATAKA UNDERTAKING)

On October 1st, 1980, the government soap factory was restructured into "Karateka Soap and

Detergent Co., Ltd.". The company has registered as a public limited company. Today, the

company uses a variety of products in toilet soaps, detergents, Agarbathies and cosmetics.

1.3.1 Vision Statement:

Sync with globalization, global trends and national policies for the use of technology

in all aspects of governance.

Ensure the global presence of Mysore sandalwood products while leveraging its

unique strengths to leverage current technology solutions through intelligent and

selective diversification.

Ensure all aid and excellent status of the Indian government and all technology

alliances.

In addition, ensure that Karnataka’s position as a supporter and provider of technical

services to the public and private sectors of the world, countries, and other countries.

Provide technical products and services to the general public at the most affordable

prices in accordance with the policies of the welfare state.

Do our best to maximize our profits.

The most important thing is to earn valuable foreign exchange for either the country

or the country and the country.

Mission Statement:

To serve the national economy

To achieve self-reliance.

Promote purity and high quality products.

Maintain customer loyalty.

Established the reputation of Mysore Sandalwood soap based on pure sandalwood oil.

8

KS&DL policy:

Seek environmental responsibility suppliers to purchase goods and services.

Communicate its environmental policies and best practices to all employees.

Set goals and monitor progress through internal and external audits.

Work hard to design and develop products that have a friendly impact on the

environment during the manufacturing process.

Reuse and recycle materials as much as possible to minimize energy consumption and

waste.

KS&DL Trademark

"SHARABHA"

It is adopted as the official symbol of KS&DL's official logo.

Therefore, Sharaba symbolizes the elimination of imperfect and unchanging power. Mysore

Maharaja adopted it as his official symbol. It quickly took pride in its position as a quality

symbol for government soap factories, reflecting the excellent standards of Karnataka Soap

and Laundry Co., Ltd.

Slogan

"Natural products and exotic spices"

The global demand for its products is very large and regularly exported to UAE, Buren, Saudi

Arabia, Kuwait, Qatar and South America. KS&DL's entire soap is made from raw materials

plant-derived materials, completely free of animal fats.

9

Company Status:

The company mainly relies on the South market. The availability of retail outlets, especially

Mysore sandalwood soaps, is comparable to that of other similar industries in the high end of

the South. In other parts of the market such as the eastern and northern markets, the

penetration rate of KS&DL products is relatively poor, depending on the company's

distribution structure, the best talents and the strength of on-site personnel.

With the increase of trust in distribution, the company did not foresee any problems with the

predicted sales through redistribution schemes.

In the future, the Indian government’s policy also sees public sector companies entering the

industry in large quantities by offering products to consumers at reasonable prices.

The government soap factory in the central region of South India claims that it will prioritize

the expansion process in view of the availability of exotic natural sandalwood oil.

1.3.2 Product Introduction:

KS&DL is the real successor to India's golden heritage. Continue the tradition of excellence

over 80 years and use most effective the fine East Indian sandalwood cleaning soap inside the

global. Products produced with the aid of KS & DL are soaps, detergents, and Agarbathies

and sandalwood oils.

10

Products Manufactured by KSDL

NAME OF THE PRODUCT UNITS OF GRAMS

Mysore Sandal Soap 75,125

Mysore Sandal Classic Soap 75

Mysore Sandal Gold Soap 75.125

Mysore Sandal Baby Soap 75

Mysore Special Sandalwood Soap 75

Mysore Rose Soap 100

Mysore Sandal Herbal Care Soap 100,125

Mysore Jasmine Soap 100

Wave Soap 100

Mysore Lavender Soap 150

Mysore Sandal Bath Tablet 150

Mysore Sandal Classic Bath Tablet 150

Mysore Jasmine Bath Tablet 150

Mysore Special Sandal Tablet 150

Mysore Sandal Rose Tablet 150

Mysore Sandal Guest Tablet 17

11

GIFT RANGE

SBT

SJR

06 IN 01

GOLD SIXER

OTHERS

Washing Half Bar

Washing Sandal Baby Wash

DETERGENTS:

NAME OF THE PRODUCT UNITS IN GRAMS

Mysore detergent powder 1000

Mysore detergent powder 500

Mysore detergent cake 125

Mysore detergent cake 250

TALCUM POWDERS:

NAME OF THE PRODUCT UNITS IN GRAMS

Mysore Sandal Talc 20, 50, 100, 300

Mysore Sandal Baby Talc 100, 200, 400

12

AGARBATHIES:

NAME OF THE PRODUCT

Mysore Sandal Premium

Mysore Sandal Regular

Mysore Rose

Nagachampa

Suprabhatha

Mysore Jasmine

Parijatha

Sir M.V.100

Bodhisattva

Venkateshwara

Durga

Ayyappa

Alif Laila

Meditation

13

1.3.3 Areas of Operation

Global Income Is Good For Them

Its products are in fantastic call for international and are frequently exported to UAE,

Bahrain, Saudi Arabia, Kuwait, Qatar, Southeast Asian international locations, and North and

South America. Of course, sandalwood oil is enjoyed very plenty after the arena's leading

perfumery. All KS&DL lavatory soaps are crafted from vegetable oils and fats and are

completely freed from animal fats.

1.3.4 Infrastructure Facilities

Canteen centers

Library

Frame

Ready room

1.4 Competitors of KS&DL

KS&DL is facing fierce competition in domestic and worldwide markets. Some of its

predominant competitors are: -

M / s. Hindustan Unilever Co., Ltd.,

M / s. Godrej Soap Private Limited,

M / s. Proctor & Gamble

M / s. Wipro

M / s. Nirma Soaps Private Ltd,

M / s. Jyothi Laboratories

14

1.5 SWOT ANYALSIS

STRENGTHS

This is the handiest cleaning soap in India that incorporates pure sandals and almond

oil

Passed ISO 9002 and ISO 14001 certifications.

The first sandalwood soap Production Company.

The brand name of the soap marketplace for many years.

In the South, there's a superb dealer network to make certain that products cowl every

patron.

WEAKNESS

Weekly sales network in northern and eastern India.

Summer cleaning soap.

Defective marketing techniques, i.e. lack of effective advertising and promoting.

It changed into synthetic after which manufactured in Karnataka after Andhra Pradesh

and Tamilnadu.

Excessive exertions fees result in high charges.

OPPORTUNITIES

Traditional traditions trust that sandalwood oil is good for the skin.

Skin care is triumphing the eye of clients.

Government guide and large manufacturing potential.

Long-term benefits in the industry.

There is a huge marketplace and huge demand.

15

THREATS

Government rules might also reduce the boom capacity.

Plants and machines want to be updated.

Other sandalwood soaps available on the market.

Other competitor products inclusive of Rexona, Moti, Santoor, and many others.

Entering a new multinational business enterprise in a cleaning soap organization.

1.6 Future Growth and Prospectus

1. Introduction Antibacterial, herbal transparent soap made with 33 crucial oil-Based

perfumes, Aloe Vera, diet E and different additives, suitable for all types of skin and

all seasons.

2. Improvements to Existing Products Mysore Sandals Classic improves moisture and

skin circumstance.

3. Introduce 50 grams, 100 grams of sandalwood powder to meet developing spiritual

needs.

4. Launched a new high-performance laundry detergent for sale in bulk packaging

establishments.

5. Get market leadership.

6. Introduce new alternate plans to increase sales.

7. Positive marketing and promoting are part of the advertising.

8. Reduce distribution expenses.

9. Reduce prices in all regions.

10. Make instantaneous choices in certain purchasing sports.

11. Promptly launch and implement market selections.

12. Ensure effective inner controls.

16

1.7 Financial Statement

Profit and loss account as on 31-3-2016 to 31-3-2017

Particulars Amount in Rs

2016

Amount in Rs

2017

Revenue

from operations

4,11,86,92,228 4,55,14,24,227

(-)Excise Duty 4511,22,681 499425579

Net Revenue from operations 3667569547 4051552130

Other Income 66185101 72539873

3733754648 4124538521

Expense:

Cost of material consumed 1565420225 2336112863

Purchased of stock in trade 28126768 27408943

Change in inventory of finished

goods, WIP & stock in trade

91497342 (461808294)

Employee benefit ex 553741174 576036096

Finance cost - 823879

Depreciation 13824174 9582530

Other expenses 625711494 736598741

Total expenses 3016685042

Profit before exceptional

And extraordinary items and tax

717069606

Provision for taxation

Current tax 2395736787 293573687

Prior period tax 20600537 66941733

Deferred tax liability (14109355) (14862385)

Profit or loss after tax 471004737 471004737

EPS 1480 1719

17

Balance Sheet of 31-3-2016 to 31-3-2017

Particulars Amount (Rs) as at

31-3-2016

Amount (Rs) as at

31-3-2017

LIABILITIES

Shareholders fund

Share capital 318221000 318221000

Reserves and surplus 1723591979 2195859837

Revaluation of land 775891370 7758591370

NON-CURRENT

LIABILITIES

Long term borrowings 35000000 35000000

Other non-current liabilities 47836024 97525385

Long term provisions 287296043 277156830

CURRENT LIABILITIES

Short terms borrowings - -

Trade payables 79704737 38070798

Other current liabilities 354004874 382742711

Short term provisions 338224146 465763092

TOTAL 10942470173 11568931023

ASSETS

NON CURRENT ASSETS

Fixed assets 780164745 8036322785

Non-current investments 71729359 71729359

Deferred tax 52260065 67122450

Long term loans and

advances

291568365 256033090

Trade receivables 16923848 15054017

CURRENT ASSETS

Inventories 1053863184 1815626392

Trade receivables 252260569 227542169

18

Cash and cash equalents 1051439256 821869852

Short loans and advances 272260782 329360168

Other current assets - -

TOTAL 10942470173 11568931023

Ratio Analysis

Stock turnover Ratio= Cost of goods sold

Average Inventory

= 28077018567.00

806819926.00

=3.47

Raw materials turnover Ratio= Net Sales

Average raw materials

= 2336112863

806199266.00

=2.89

Work in progress turnover Ratio= Net Sales

Average WIP

=2807718567

3566348884

=7.87

Finished goods turnover Ratio= Net Sales

Average finished goods of inventory

= 2807718567

538952800.00

= 5.2

19

2.1 Theoretical Background of the Study

Introduction

Inventory refers to the products and materials held by means of the corporation for final

resale. Inventory control is a science this is mostly worried with specifying the shape and

percentage of stock objects. It is needed that distinct places inside the facility or many

websites of the supply community be carried out before the normal and deliberate

manufacturing fabric stocks.

Sink inventory management and strategies, discover stock necessities, set desires, offer

replenishment strategies, record actual and projected stock status, and cope with all features

associated with fabric tracking and management.

Materials which can be considered to be part of the company property, semi-finished and

absolutely completed merchandise are ready or geared up for sale. Inventory is one of the

most crucial assets. Inventory turnover is one of the important assets of shareholders' income

and comply with-up earnings.

Inventory is likewise not top due to the fact stock is simply too small because of the ability

income and capacity sales of the enterprise and the hazard of potential marketplace share.

Meaning of Inventory

The time period "inventory" comes from the French word "Inventaire" and the Latin word

"Inventariom" which includes a sequence of things. Inventory refers back to the stock that the

organization offers for promoting products and the components that make up the product. In

other phrases, stock includes belongings with the intention to be offered in the path of each

day commercial enterprise operations.

His stock has an essential financial effect and the monetary manager is chargeable for

ensuring that inventory is properly monitored and managed. He have to emphasize the

monetary perspective and begin the plan in order that others can participate in and take part

inside the powerful control of stock.

20

The definition of inventory:

It can be used to refer to tangible property that may be visible, measured, and counted at

positive times in uncooked substances, manufactured products, finished products, bought

items on the market, and so forth. .. With regard to economic statements and associated facts,

reference may be made to the amount of all goods stocks which might be allocated to the

business enterprise at a given time.

Reasons for inventory management:

1. Time: The time lag represents the deliver chain, and from the dealer to the user

requires you to maintain a certain quantity of inventory for "shipping time".

2. Uncertainty: Inventory is maintained in buffer stocks to meet demand, deliver, and

transport uncertainty.

3. Economies of scale: The idle country of a unit is imperative on every occasion the

person wishes it and in which he desires it, and often brings many expenses in phrases

of logistics. So quite a few buying, transferring and storage brings economies of scale,

so inventory.

The purpose of stock control:

1. Raw fabric shares are reserved for later conversion to semi-completed or completed

merchandise. Raw material shares must exist as it isn't always economically feasible

to either buy or arrange the shipping of uncooked materials wished within the

manufacturing technique.

2. Ensure continuous deliver of uncooked materials and materials to sell uninterrupted

manufacturing keep enough finished products to reap easy income, operations and

green customer service.

3. Inventory lets in reasonably-priced bulk purchases of raw materials and the

processing of those raw substances into finished products is the most reasonable

quantity, referred to as “economic batch”.

4. Reduce every other's dependencies so that the business enterprise can set up its

operations independently of some other enterprise.

5. Inventory management allows to lessen material handling prices.

6. It helps to rationally observe employees and system.

21

7. Facilitate product show and service to clients.

The Benefits of stock control

1. Experience has shown that with a systematic stock manipulate device, inventory may

be decreased everywhere among 15% and 16%, and excessive shortages are often

decreased. Rupee inventories of Rs 10 lakh discount can be equivalent to 2 Rs rupees

in keeping with 12 months, whilst a intense shortage may be extra conducive to

continuous stock and emergency procurement.

2. Ensure that sufficient items are available to consumers and avoid shortages as tons as

feasible at the lowest price.

3. Utilize available price range within the only way and keep away from more

expenditures such as excessive inventory.

4. Risk of loss because of modifications in stock charges when inventory is decreased.

5. Provide buffers among paintings centers to ensure easy and green operation of the

business enterprise.

6. Quantity cut price gain for bulk purchases.

7. In different phrases, it ensures that the fabric in the marketplace isn't always scarce.

8. Estimate the opportunity of reordering.

9. It allows to limit losses because of deterioration, scrap, damage, and many others.

10. When demand for items fluctuates or seasonal, help keep the economy by way of

soaking up a few fluctuations.

11. Controlling the buildup and minimization of the closing stocks, and removing as a

great deal of the seen death inventory as possible.

12. Use the benefits of price fluctuations.

Types of Inventory

1. Raw substances: Raw materials are inventory gadgets used to supply additives,

subassemblies or completed products all through the conversion process of the

manufacturer.

22

2. Work-in-method: The paintings-in-technique includes all materials, elements

(additives), additives, and subassemblies which might be processed in the gadget or

ready to be processed. This generally includes all substances in the uncooked fabric

which are applicable to the initial procedure until the fabric has been fully processed

and is expecting final inspection and popularity previous to adding the finished

product.

3. Finished product: The finished product is a finished part that can be ordered through

the customer. Work in technique and completed product stock. From this factor of

view, the completed product can be sold at once to quit users, sold to shops, offered to

wholesalers, dispatched to distribution facilities, or scheduled in step with client

orders.

4. Transit Inventory: Transit stock is because of the need to move gadgets or

substances from one location to every other, and from one vicinity to another requires

a sure transit time. Sometimes this is known as pipeline inventory.

5. Buffering inventory: As stated earlier, stock is sometimes used to save you deliver

and demand uncertainty, in addition to unpredictable events which include terrible

shipping reliability or terrible supplier product exceptional. These stocks are regularly

called safety stocks.

6. Predict inventory: Because of the anticipated destiny events, businesses frequently

purchase and store stock that exceeds modern-day call for. Such occasions may

additionally consist of growing costs, seasonal demand for boom, and even an

upcoming strike. This method is normally utilized by stores, who generally set up

inventory the primary few months of unusually high call for for his or her

merchandise. For producers, the expected inventory permits them to construct

inventory while demand is low, so that after stock is accelerated when call for is

drawn, stock will be decreased, and agencies do not should reply via increasing

production time. As a result, the business enterprise has averted each the increase in

demand due to multiplied demand and beyond regular time for recruitment fees.

23

7. Decoupled inventory: If something, few humans will see a manufacturing facility

wherein the processing of each gadget is precisely the equal. In fact, a device can be

several times quicker than machine processing components in the front of or at the

back of it. However, if a person walks via the manufacturing facility, it appears that

all machines can run efficaciously on the equal time. It is likewise possible that

several machines are being repaired or a few shape of preventive upkeep is being

finished even as passing thru the manufacturing facility. Even so, this doesn't seem to

interrupt the gadget's drift of merchandise.

8. Cycle inventory: People familiar with the concept of monetary order amount (EOQ)

understand that EOQ is a try to stability stock holding charges or preserving expenses

with the charges of ordering or putting in place machines. When big portions are

ordered or produced, stock maintaining expenses boom, but ordering/setting fees

lower.

Interview control capabilities:

1. Always better manipulate (ABC) category:

ABC evaluation is a commercial enterprise time period used to define inventory type

strategies that are often used in fabric management. It is likewise referred to as

selective inventory manipulate. Policy primarily based on ABC evaluation.

Very strict controls and accurate records.

Less strict controls and top records.

The simplest manipulate and the smallest record.

2. High medium & low (HML) category:

The (HML) category follows the equal process used in the ABC category. The only

distinction is that inside the case of (HML) high, medium and coffee, the taxonomic

unit fee is the usual rather than the yearly intake price. The stock items ought to be

listed in descending order of unit price, and the three limits should be decided by way

of control.

3. Vital Essential Designable (VED) evaluation:

24

These substances may be categorized in keeping with their key capabilities. The

criticality can be expressed as whether or not the material is crucial to the production

system, or is important to the production manner or applicable to the manufacturing

technique. This classification is known as VED analysis. V stands for important, E

stands for simple, and D stands for ideal task. VED analysis is normally used for

spare elements.

4. SDE Classification:

The SDE class is based at the availability of substances. It is very beneficial inside the

case of a shortage of inventory. The 'S' here refers to the panic stock objects which

might be normally imported and the objects referred to as 'D' Difficult Inventory

Items within the deliver scarcity class, which might be available regionally but are

hard to gain. 'E' refers to items which might be simply to be had and to be had on the

nearby marketplace.

5. FSN type:

In this technique, inventory is classified according to the form of stock. Here 'F'

stands for instant movement, 'S' for gradual movement, and 'N' for no motion. This

method can also involve a beneficial list to avoid scrapping. In order to determine

whether a selected stock is moving fast, or the date of receipt or the overdue date of

transport, it's far taken from the later who has handed since the ultimate transaction.

These items are normally divided into 12 months. Items that don't move can be in

addition tested and their disposal may be considered.

6. Order circulation system:

In this system, each inventory object is checked frequently and an order is launched to

restore the stock deliver stage for every stock in inventory. What is the frequency of

the evaluate? The frequency of overview depends basically on stock gadgets. At every

review date, the specified amount of fabric will bring the inventory to the predicted

deliver level.

Inventory machine approach: There are two trendy methods for stock systems,

together with

a) Fixed Order Quantity System (Q System)

25

b) Fixed Order Cycle System (P System)

7. Fixed Order Quantity System: The machine orders a certain amount of fabric for

every foreign money stage study to the logger degree. This is just EOQ. Periodically

evaluation the constant order cycle system stock vicinity for every item. The

distinction from organization to organization relies upon at the importance of the

fabric.

8. Timely (JIT):

From the attitude of uncooked fabric procurement, because of this there is no stock at

any level of production, and the exact call for is purchased at each successive level of

each manufacturing on the proper time. In other phrases, the uncooked substances that

hold the bottom level through the inventory wearing costs may be minimized, and the

threat of loss resulting from the out-of-stock position can be properly averted. Judging

from the production of products JIT way that the products are best finished when the

order is acquired, and no finished product storage can avoid the price of the finished

product. JIT is likewise referred to as Zero Stock Production System (ZIPS) Zero

Inventory (ZIN) Material (MAN) or Time Period (NOT).

9. Economic Order Quantity (EOQ):

EOQ is used as a non-stop part. The Economic Order Quantity (EOQ) is the variety of

devices that the company need to upload to each inventory to reduce overall inventory

expenses (e.g., keeping fees, order prices, and out-of-stock charges). The inventory

system constantly video display units stock levels inside the stock machine and orders

a hard and fast amount every time the stock stage reaches a particular reorder factor.

EOQ offers a model for calculating the right reorder point and most suitable

reordering

Quantity to make certain there may be no shortage of on the spot replenishment stock.

It can be a precious tool for small enterprise owners who want to decide how tons

stock they want to store, what number of objects are ordered every time, and the way

generally they're reordered to limit costs.

EOQ components:

EOQ can be acquired with the aid of the usage of two techniques

26

a) Test and blunders strategies and

b) Simple or simple mathematical formulas.

Here, for you to calculate EOQ, we use a easy shortcut technique. The system is

EOQ = 2DC0 / CC

D = annual call for, Co = ordering value, Cc = transportation value

S = price of setting an order

I = inventory incorporates a unit of value

EOQ model assumptions:

The following assumptions are implicit inside the calculation of EOQ:

• The call for products remains consistent at some point of the complete length.

• Order time (the time from ordering to receiving will no longer exchange.

• The charge in keeping with unit of product does no longer exchange.

The inventory holding price is primarily based on the common stock.

• The ordering value is unchanged.

• All necessities for the product will be met (no go back is authorized).

2.2 Literature Review

1. Risk Aversion in Inventory Management “David Simchi-Levi” (2007):-

In this text, we propose a framework for incorporating a couple of levels of hazard

aversion. Inventory fashions and multi-phase fashions that coordinate stock and

pricing techniques. We show that the structure of the surest method for decision

makers with an exponential software function is basically similar to the shape of an

most excellent chance-neutral stock strategy.

27

2. A review of inventory management research in major logistics journals: Themes

and future directions “Brent D. Williams” (2008):-

It will provide reviews of stock control articles published at foremost logistics shops,

discover topics in the literature, and provide future direction for stock management

research with a purpose to be posted in logistics journals. Articles posted seeing that

1976 contributed to the stock control review and cataloging. The article is segmented

primarily based on the primary topics extracted from the literature and the important

thing assumptions made by way of extra inventory management models. Two

important issues had been discovered in logistics studies especially that specialize in

inventory control.

3. Inventory management –A case study by Dr. Angel Raphella. S (2014)

This study is about the process of analyzing the company's current forecasting model

and the proposed inventory control model to help them solve the problem. Therefore,

it is recommended to use economic order quantity and reordering points to help them

reduce product out of stock.

4. A study on Relationship between inventory management and company

performance by Nurul Nadia Suraidi (2016)

It particularly examines the relationship among stock control and employer overall

performance, and conducts interviews with corporation control to determine the

business enterprise's problems and systems. The dating between the two is primarily

based on inventory days and go back on belongings ROA evaluation

5. Case Study on Inventory Management Improvement by “Darya Plinere and

Arkady Borisov”(2015-18)

This is a challenging issue area in supply chain management. In order to meet

customer needs, inventory should be in the warehouse. Inventory holding costs, and

this frozen funds may be lost. Its task is to find out the amount of inventory that

avoids excess inventory and meets customer needs

28

6. Inventory of inventory management practices on organizational competitiveness

by Kamau Lucy Wangari (2015)

The main reason for holding inventory management measures is to provide regular

raw materials when needed. To ensure they need to be delivered and measure quality

standards, they need to be in place market trend.

7. Inventory management, cost of capital and firm performance by Ashraf

Mohammad Salem Alrjoub (2017)

This study is the effect of stock type on the connection. This relationship is

encouraged by way of a number of things, such as the fee of capital that isn't always

considered. This is the law of the fee of capital. Using Pearson correlations and panel

GMM estimates, the results of the have a look at reveal the kind of stock management

that considers its lengthy-term impact on corporation overall performance.

8. Analysis of inventory control techniques by Akhilesh Jayakumar (2013)

Each corporation needs stock to run its activities smoothly. It acts as a component

between production and distribution approaches. Inventory investment is the most

crucial a part of most company liquidity and liquidity. Therefore, right manipulate and

control of inventory is very essential. The purpose of inventory management is to

make sure that an enough quantity of fabric is to be had on call for and to limit stock

investment. Therefore, with a purpose to understand the character of organizational

inventory control, this paper analyzes unique stock manage techniques to attain an

efficient stock control system.

9. Research on optimal policy of single-period inventory management with two

suppliers by Baimei Yang (2014)

We studied an unmarried-length stock manage trouble which include impartial

suppliers. For the first supplier, the consumer generates high variable costs but the

fixed expenses are negligible; for the second one supplier, the customer's variable

price is lower, however the constant price is positive. At the identical time, the wide

variety of orders is confined. When the conserving and absence price capabilities are

prominent, we develop an ultimate inventory manipulate approach. We also carried

29

out a few numerical experiments to analyze the impact of constant placing fee K and

sorting capacity Q at the finest manage strategy.

10. Spare parts inventory control by Jose Roberto do Rego (2011)

Inventory items are required for the maintenance and repair of final products,

vehicles, industrial machines and equipment, which require high investment and

significantly affect customer satisfaction. Due to the large number of different items

and low requirements, inventory management is complicated. In general, the literature

review identifies the following inventory management research opportunities:

deciding whether inventory criteria, first and last order quantities, demand forecasting

and inventory control model integration, and case studies are practical.

11. Inventory management practices and their implications on perceived planning

performance by Patrik Jonsson & Stig- Arne Mattsson (2008)

This article focuses on the usage of the material planning method to control the glide

of substances to the inventory of purchased objects in manufacturing and distribution

organizations. The first sub-goal is to assess the perceived software performance of

the fabric planning approach used to control exclusive stock kind fabric flows in

production and distribution companies.

12. ABC Analysis for Inventory Management by Handan Hal Ravinder (2014)

ABC evaluation is a well-defined class technique based at the Pareto principle and is

used to decide which gadgets must be prioritized in agency inventory management. In

discussing this topic, present day operations management and deliver chain textbooks

use the dollar amount as the sole criterion for acting type. The authors believe that the

survival of modern organizations and supply chains in a capability to speedy deliver

the right merchandise to particular markets is prime. With the emergence of providers,

intermediaries, and clients round the sector, the energy of merchandise has

progressively diminished, and this recognition on single requirements has been out of

place. A huge quantity of studies are primarily based on multiple popular ABC

analyses which have accumulated because the Nineteen Eighties and endorse that

textbooks include their main findings and methods into their dialogue of this subject

matter.

30

13. A multi criteria inventory management system for perishable & substitute

products by Linh N K Duong (2015)

Perishable products are a crucial location inside the retail industry and in our day by

day lives. However, while thinking about product substitution (presenting extra

options), the quick life of perishable products poses a primary challenge to stock

management (e.g., one-0.33 of the food is wasted). The principal question is: What

are the appropriate "inventory techniques" while our products are each perishable and

alternative? Propose suitable performance signs to evaluate the whole device and

offer powerful answers which might be also easy for specialists to recognize and

adopt. Therefore, this paper proposes a method of the use of multi-metrics, inclusive

of order charge variance ratio, common stock and fill price.

14. Improvement of inventory control & forecast according to activity based

classifications by Jui-Chan Huang (2017)

Inventory deliver is a major issue for all industries. Provide merchandise to clients

who need inventory practice. This can reap fast delivery and decrease waiting time for

clients in order that the employer can advantage from it. Any out-of-stock or shortage

will bring about loss of clients due to the fact their desires can't be met. This will

harm the organization's profitability and market competitiveness. Inventory

manipulate is important to maintain liquidity and keep away from backlogs

15. Inventory management and the Bullwhip effect during the 2007-2009 reccesion

by Kevin J. Dooley (2010)

The monetary recession of 2007-2009 caused a sharp drop in consumer call for. We

use wholesale inventory and sales records to have a look at the impact of the recession

on U.S. Production manufacturers, wholesalers, and outlets. We determined that the

wholesaler's response changed into slow and violent, indicating the bullwhip impact,

while the retailer reacted quick and conservatively, indicating a strong environment.

Smooth call for and stock proved to be opportunity responses to good sized

adjustments in call for.

31

16. Theory of Inventory management based on demand forecasting by Kot S.,

Grondys K., Szopa R. (2011)

The purpose for this is that the everyday purpose of this situation has extended. The

place to begin for lowering stock tiers is to forecast marketplace demand through

marketplace forecasts via running with all hyperlinks inside the deliver chain.

Therefore, in terms of call for forecasting, the characteristics of facts go with the flow

and the form of hyperlink cooperation are critical.

17. Inventory Management Practices and Operational Performance by Nsikan John

(2015):

This observe plans the control practices of flour processing corporations and their

effect on commercial enterprise overall performance. The look at used 5 flour

processing businesses in Lagos. Structured questionnaires are the principle tools for

gathering relevant raw statistics. Descriptive statistical strategies inclusive of mean

and popular deviation are used to research the converged data. In addition to huge

production businesses, maximum medium-sized flour agencies use one of a kind stock

management techniques within the science and excellent practice models.

18. Consistent Inventory Control by Elvira Marie B. Aske (2009)

The most important contribution of this paper is to advise extra preferred

neighborhood consistency guidelines for comparing stock control structures.

Consistency manner that the constant kingdom mass balance (overall amount,

components and levels) of each unit and the complete plant is glad. In addition,

neighborhood consistency is a really perfect belongings, because of this that the

nearby mass stability only meets the nearby inventory cycle.

19. Examined inventory management from an incentive and control perspective

“Baldenius and Reichelstein” (2000):- They display that the residual earnings

performance indicators based totally on historic value accounting provide managers

with incentives to make top of the line production and stock intake selections. Low-

fee or marketplace rules display an impact while stocks might also come to be out of

date due to surprising call for stocks.

32

20. “Inventory Management and Production planning and scheduling” “Moon

likyeong” (2001):

He posted a paper on this challenge, that's the 1/3 version of era inventory manipulate

and manufacturing released in 1979 and 1985. Bob Pyke have become the co-creator

of this model, and has carried out a few vital variations, many deliver chain

management Level inventory, timely and ERP.

33

3. Research Design

Research way attempting to find information, answering questions, and fixing problems. This

is a practical investigation; that is an "organized research." It seeks to discover motives of

unexplained phenomena to clarify doubts and correct wrong statistics.

Research layout method gathering relevant statistics and techniques for evaluation,

deliberating the goals of the research and the supply of personnel, time and money. In fact,

studies is of first-rate importance to the reliability of the consequences to reap the

consequences, and this constitutes a strong basis for the complete observe.

Research layout is important as it facilitates smooth navigation of various research sports, in

order that studies is as green as feasible, and spends the maximum data with minimum

attempt, time, and money.

The type of research executed is PURE RESEARCH, i.e. it is carried out for knowledge and

there may be no aim to apply it to exercise. This is a primary research or fundamental studies.

This examine isn't trouble-oriented.

3.1 Statement of the Problem

Every size corporation need to keep funding, and it forms a crucial a part of running capital.

It is envisioned that inventories within the Indian enterprise constitute a critical a part of the

stock of liquid assets. Not best do they require a huge quantity of funding to achieve those

stock, but in addition they require that they invest in stock this is stated to be idle, but in any

organization production or transaction Inevitable, so inventory costs have emerge as

essential.

As raw fabric expenses growth, the enterprise faces a few problems. The essential

components inclusive of soda ash, linear alkyl benzene and sodium tripoly phosphate have

many serious troubles in usability. The deliver and demand whole for vegetable oil is 1.5 to

20,000 lots and is met thru imports.

34

3.2 Need of the Study

Inventory is a critical a part of each corporation. Optimal inventory management is the

remaining goal of stock planners.

1. Understand the materials used within the manufacturing system.

2. Understand stock price fluctuations.

3. Properly preserve inventory ranges based on consumer desires.

4. Understand inventory ranges to contribute to the agency's profitability.

3.3 Objectives

1. To have a look at the effectiveness of inventory control on the Soap and Detergent

Company in Karnataka.

2. Assess the elements that have an effect on inventory.

3. Identify problems related to inventory control and locate appropriate measures to

triumph over these troubles.

4. Propose techniques for improving stock management.

3.4 The scope of the Study

1. The look at of stock management led us to have a broad expertise of the troubles

confronted via the limited soap and detergent in Karnataka.

2. This look at offers us with the limited capability of Karnataka soap and detergent.

3. This look at tries to discover the consumption of materials within the manufacturing

manner.

4. The significance of this look at is to preserve stock.

3.5 Research Methodology

This is an analytical have a look at that determines the provision of inventory through tables

and charts.

35

Primary Data

The data is collected through interactions and discussion with the executives working in

division.

Secondary Data

The data is collected through annual reports, magazines, published through the required

information.

3.6 Hypothesis

H0:- There isn't any sizeable relationship between low productiveness and bad stock

management.

H1:- There is a huge relationship among low productivity and horrific stock control.

3.7 Limitations

1. The time supplied for the study is limited.

2. Due to the quick research time, it is restrained to KS&DL.

3. Due to the work schedule within the enterprise, interplay with employees is very

restricted

4. Some of the records disclosed via employees may be stored personal.

5. It focuses only on inventory control and does now not take into account lengthy-term

financing or funding.

3.8 Chapter Overview:

Data collection, analysis, interpretation, etc. Are labeled inside the following order:

Chapter 1: Introduction

This is an introductory chapter of the take a look at and in short introduces "stock control." It

offers an overview of the studies, and at the equal time, the reader can examine more

approximately the organization’s statistics, merchandise and manufacturing approaches.

36

Chapter 2: Conceptual Background and Literature Review

This chapter interrupts the theoretical framework and literature evaluation of various authors.

Chapter 3: Research Design

This bankruptcy introduces statistics series techniques, research objectives, studies

boundaries, and studies scope.

Chapter 4: Analysis and Interpretation

This bankruptcy analyzes KSDL's inventory control and analyzes the cost elements.

Chapter 5: Summary of Findings, Conclusions and Recommendations

This chapter summarizes the undertaking report and includes a precis of the survey effects

and pointers. These are drawn directly to the gaining knowledge of desires.

37

4. Analysis and Interpretation

Introduction:

Analysis and Interpretation is the process of identifying strength and weakness of a

firm by properly establishing relationship between two items. It is useful for decision

making and there are number of methods & techniques which are generally used in

analysis of financial services.

Meaning of Analysis:

Analysis is the process by which the whole body of gathered data facts, figures and

ideas is converted into meaningful & useable information. The data is placed on its

appropriate setting & consistent relationship drawing general inferences.

Following are the procedure involved in the integrated operations of analysis of data:-

1. Classification of data.

2. Tabulation of data.

3. Statistical analysis of data.

Meaning of Interpretation:

Interpretation refers to the relationships with the collected data. It’s the mechanism

through which the factor that appears to explain what has been observed by researcher

during the course of her research.

38

TABLE-1

Table showing the progressive base year percentage growth of inventory for this

2013 inventories is treated as Base year period 2017 Rs. in crores

Year Inventory Growth of inventory

2013 496456170 101.41

2014 808143158 162.78

2015 1059669174 131.12

2016 1053863184 99.45

2017 1815626392 172.28

Percentage growth of total inventory = Current Year Inventory x 100

Base Year Inventory

Analysis:

The above table shows the percentage growth of total inventory year 2012 is

taken as the base year. 101.41 during the year 2013, 162.78 in the year 2014, there is a

decrease in the year 131.12 in 2015 and 2016 decreases in 99.45 and the current year it

was increased to 172.28.

39

GRAPH- 1

Graph showing the progressive base year percentage growth of inventory for the period

2013-2017

Interpretation:

In the graph the year 2016 the growth of inventory is 99.45 but in the current year the

growth of inventory increased to 172.28.

101.41

162.78

131.12

99.45

172.28

0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017

40

TABLE NO- 2

Table showing turnover of KSDL for past 5 years Amount in Rs

Year Turnover Profit before Tax Profit after Tax

2012-2013 28621.32 3983.30 2174.19

2013-2014 31751.67 5627.70 3283.74

2014-2015 35687.97 6651.14 4518.76

2015-2016 41271.81 7170.69 4710.04

2016-2017 45514.24 8930.43 5470.99

Analysis

The Above table shows the turnover of profit before tax and profit after tax. In the year

2013 the profit was 2174.19 and in next preceding year the profit was increased to in

2014 it was 3283.74, in 2016 it was 4710.04 in the current year 5470.99.

41

GRAPH-2

Interpretation:

In the graph the year 2015 the profit was 4518.76 and in the year 2016 it was increased to the

4710.04 and the next year the profit was increased to the 5470.99.

2174.19

3283.74

4518.76 4710.04

5470.99

0

1000

2000

3000

4000

5000

6000

2013 2014 2015 2016 2017

42

TABLE-3

Percentage of inventory to working capital Rs in crores

Years Inventory Working capital Percentage

2012-2013 49,64,56,17,00 94,49,75,057,00 52.24

2013-2014 80,81,43,158.00 1,05,12,46,867.00 76.87

2014-2015 1,05,96,69,174.00 1,33,26,46,433.00 79.87

2015-2016 1,05,38,63,184.00 1,85,78,90,034.00 56.72

2016-2017 1,815,623,392.00 2,30,78,21,980.00 78.67

Percentage of inventory to working capital = Inventory x 100

Working capital

Working capital = Current asset

Current Liabilities

Analysis:

The above table shows the percentage growth to working capital in the year 2012-13

Taken as the base year. 52.54 in during the year of 2013, increases of 76.87 in 2014

again increase 79.52 in 2015, and decreased to 56.72 in 2016, in the current year it

was increased to 78.67.

43

GRAPH-3

Interpretation:

Inventory working capital which helps to measure the short term solvency of company. In the

year 2013 the working capital was 52.24, in 2014 it was 76.87, in 2015 it was 79.87, in the

year 2016 it was decreased to the 56.72 and in the current year it was increased to the 78.67

so the company will be in the good situation as compared to the last year.

52.24

76.87 79.87

56.72

78.67

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017

44

TABLE-4

Table showing the percentage of Inventory in current assets Rs. in crores.

Years Inventory Current assets Percentage

2012-2013 49,64,56,170.00 1,29,93,72,293 38.21

2013-2014 80,81,43,158.00 1,68,46,89,526 47.97

2014-2015 1,05,96,69,174.00 2,04,28,53,316 51.87

2015-2016 1,05,38,63,184.00 2,62,98,23,791 40.07

2016-2017 1,81,56,23,392.00 3,194,398,581 56.83

Percentage of inventory to current assets = Inventory x 100

Current assets

Analysis:

The table shows the percentage of inventory in current assets. 2013 is taken as base year.

47.97 during the year of 2013-14 decrease in 51.87 in 2014-15, 40.07 in 2015-16, and there it

increases 56.83 in 2016-17.

45

GRAPH-4

Interpretation:

This shows the proportion of inventory of current assets if fluctuating in cyclical variation

ups & downs.

In the year 2013 the amount of inventory was 38.21 and in 2014 increase to the 47.97 next

year increased to 51.87 in the year 2016 decreased to the 40.01 in the current year it was

increased to the 56.83.

Ratios Analysis:

Inventory Turnover Ratio or Stock Turnover Ratio:

It indicates the number of time the stock is turned over (sold) during

the year. It is a ratio between net sales and average inventory.

38.21

47.97 51.87

40.01

56.83

0

10

20

30

40

50

60

2013 2014 2015 2016 2017

46

TABLE-5

Table showing the percentage of Inventory Turnover Ratio for the period 2013-17 Rs.

in crores.

Years Cost of goods sold Avg. inventory Turnover times

2012-13 1,47,37,54,991.00 49,29,85,245.00 2.99

2013-14 1,55,73,36,147.00 655,22,99,661.00 2.39

2014-15 1,55,73,36,147.00 93,39,06,163.00 2.27

2015-16 2,12,40,27,234.00 1,05,67,66,179.00 1.53

2016-17 2,80,77018,567.00 80,68,199,26.00 3.47

Inventory Turnover Ratio= Cost of goods sold

Average Inventory

Analysis:

The above table shows the inventory turnover ratio. Year 2006-07 is taken as base year

2.97times. In 2007-08 4.34 times, in 2008-09 3.76 and there is decrease in times for 1year. In

2008-09, 3.76 times and there is decrease in turnover time compared to year 2007-08 & once

again 2010-11 reduced to 3.18 times in the current year.

47

GRAPH-5

Interpretation

The ratio reveals that number of time stock is turned over during a given accounting period.

Higher the ratio, the better because it shows the finished stock is rapidly turned over. On the

other hand a low stock turnover is not desirable because it reveals the accumulation of

obsolete stock, or carrying of two much stock.

In the year 2013 the ratio was high as compared to the 2014 i.e. 2.39 in the year 2016 it was

came down to the 1.53 and it was increased to the 3.47 in the year 2017.

2.99

2.39 2.27

1.53

3.47

0

0.5

1

1.5

2

2.5

3

3.5

4

2013 2014 2015 2016 2017

48

TABLE-6

Table showing the Raw Materials Turnover Ratio Rs in crores

Year Net Sales Average raw materials Ratios

2012-13 125,32,19,829 19,94,98,469.50 6.28

2013-14 127,55,74,042 31,51,74,533.00 4.05

2014-15 160,44,03,610 50,61,94,374.50 3.71

2015-16 156,54,20,225 60,96,95,969.00 2.57

2016-17 2,336,112,863 80,61,99,266.00 2.89

Average Raw Materials= Opening stock of raw materials+ Closing stock raw materials

2

Analysis

The above table shows the Raw material turnover ratio. The raw material held for the year

2013 was 6.28 in the year 2014 it was decreased to the 4.05 in 2016 it was 2.57 in the current

year it was 2.89.

GRAPH-6

6.28

4.05 3.71

2.57 2.89

0

1

2

3

4

5

6

7

2013 2014 2015 2016 2017

49

Interpretation:

The Raw Material Turnover Ratio shows the number of items the Raw Material was replaced

during the year. The Raw Material Turnover Ratio in the year 2013 recording best

performance but later the company is not able to convert into quick raw material cycle in the

current year.

Inventory Conversion of Period

This represents the number of days of which inventories remain

before they are issued for production.

TABLE-7

Table showing the Inventory turnover conversion in number of days for the period 2013-17

Years No. of days in a year Inventory turnover

ratio

No. of days

2012-13 365 2.99 122

2013-14 365 2.39 152

2014-15 365 2.27 160

2015-16 365 1.53 238

2016-17 365 3.47 105

Inventory Conversion Period= Days in a year

Inventory Turnover Ratio

Analysis:

The Above table shows the inventory conversion period. Year 2012-13 is taken as base year

122 days. In 2013, 152 days. In 2014, 160 days. In 2015, 238 days and in 2016 it’s in the

current year it was 105 days.

50

GRAPH-7

Interpretation:

The inventory conversion period shows the increasing trend from 2013-2016 which indicates

that the conversion period of inventories into sales is goods and there is good inventory

management. But in the current year there is an decreased compared to the previous year.

Work in Progress Inventory Turnover Ratio

This indicates the number of times the work in progress inventory

turned over (related to sales) during the year. It tells the firms efficiency in manufacturing &

selling its product.

Work in progress inventory turnover ratio= Net Sales

Average WIP

122

152 160

238

105

0

50

100

150

200

250

2013 2014 2015 2016 2017

51

TABLE-8

Table showing Work in Progress turnover ratio for the period 2013-17 Rs in crores

Year Net Sales Average work progress Turnover

Ratio

2012-13 1473754991 169756996 8.6

2013-14 1557336147 56063641 27.7

2014-15 2124027234 56241589 37.7

2015-16 1611820173 55644123 29

2016-17 2807718567 356634884 7.87

Average W.I.P= Opening W.I.P + Closing W.I.P

2

Analysis:

The above table shows the ratio of work in progress. Year 2013 is taken as base year, 8.6

times. In 2012-13, 27.7 times, in 2013-14, 37.7 times, in 2014-15, 29 times in 2015-16 its

7.87 times in the current year.

52

GRAPH-8

Interpretation:

The work-in- progress turnover ratio indicates a relationship between value of goods

produced and the value of goods in process lying on the shop floor of the factory. In the

current year there is huge decreases in the turnover ratio. So there will be increased inventory

accumulated.

Finished Goods Turnover Ratio:

This represents the number of times the finished goods inventory

turnover sales during a year. This ratio indicates the efficiency of the firm in selling its

products.

8.6

27.7

37.7

29

7.87

0

5

10

15

20

25

30

35

40

2013 2014 2015 2016 2017

53

TABLE-9

Table showing finished goods turnover ratio for the period 2013-17 Rs in crores

Year Net Sales Average finish goods Turnover ratio

2012-13 1473754991 236489013.50 4.36

2013-14 1557336147 267343248.00 6.23

2014-15 2124027234 337947547.00 5.83

2015-16 1611820173 357402079.00 6.29

2016-17 2807718567 538952800.00 5.2

Finished Goods Turnover Ratio= Net Sales

Average Finished goods of inventory

Average Finished Goods= Opening finished stock + Closing finished stock

2

Analysis:

The above table shows the duration of finished turnover ratio. Year 2012-13 is taken as base

year 4.36 times, in 2013-14, 56.23 times, in 2014-15, 5.83times, & in 2015-16, 6.29 times &

in current year its 5.2.

54

GRAPH-9

.

Interpretation:

The duration of finished goods turnover ratio of 6.23 in 2013, 5.83 in 2014, again in the next

year it was increased to the 6.29 in the year 2016 it was decreased to the 4.51 and in the

current year it was increased to the 5.2.

0

1

2

3

4

5

6

7

2013 2014 2015 2016 2017

6.23 5.83

6.29

4.51 5.2

55

5.1 Findings

1. The position of inventory percentage of growth of inventory in the 2017 increased to

172.28 when compared to the last i.e. 99.45. So the growth of inventory was increased

to 72.83.

2. The position of turnover of KSDL the profit before and after tax the profit was totally

increased in current year i.e. 5470.99 as compared to the previous year 2016 was

4710.04.

3. The percentage of working capital was decreased in the previous year i.e. 56.72 and

the working capital was increased in the current year to the 78.67

4. The percentage of current assets the overall current assets was increase to the when

compare to the previous year. The production was good in the current year.

5. The percentage of inventory turnover ratio the cost of goods sold and average

inventory was increased in the current year. When compare to the previous year.

6. Raw material turnover ratio was increased in the current year as compared to the last

year. In the current year 2.89.

7. Inventory turnover ratio was increased in the current year as compared to the previous

year. In the current year the days was decreased the production was increases.

8. Finished goods turnover ratio was decreased to 5.2 in the current year.

9. The fund collected from various sources utilized for current and fixed assets.

10. The company very aggressive in maintaining inventory stock towards its total

working capital showing a cyclical variation with ups and downs.

5.2 Conclusions:

The turnover of the company has been increased in the financial year.

In KSDL rate of inventory represents a very significant proportion of current assets, the

Size of the inventory is increasing year after which indicates inefficient inventory

management in KS&DL. Necessary steps have to be taken by management. They have

to adopt the new techniques and new methods of production process in order to increase

production of the company.

56

5.3 Suggestions:

1. The cash position has to be maintained adequately even in future which help

Company to meet the short term commitments.

2. The company should follow EOQ to reduce overstocking of materials, purchase at the

competitive prices to reduce the cost of production.

3. The management must think over new policy to generate income by sufficient

utilization of existing assets.

4. In work in progress company has to maintain the same position by increasing turnover

in relation work in progress.

5. Standardization of components should go way to reduce the variety of components to

be stocked.

6. It highly recommended that the company has to increase inventory position, when if

sales demand requires so.

7. Over stocking and under stocking of raw materials should be controlled by technical

auditors, there should be co-ordination between production and inventory department.

8. The sales department should effective reduce the stocking in the finished goods

components of inventory. New sales technique should be activated to increases the

sales.

BIBILOGRAPHY

"David Simchi-Levi" (2007) "Risk Avoidance in Inventory Management", Operation

Research, Vol-2, Issue-5, Pages. 828-842

"Brent D Williams" (2008) "A Review of Inventory Management Studies in Major

Logistics Journals: Themes and Future Directions”, The International Journal of

Logistics Management, Vol. 19, issue wide variety: 2, page no. 212-232

"Dr. Angel Raphella" (2014) "Inventory Management - Case Studies", Journal of

International Management and Technology Emerging Research Journal, Vol. 3, No. 3.

"Nurul Nadia Suraidi" (2016) "Research on the relationship among inventory

management and company overall performance", Journal of Advanced Management

Science, Volume 4, Number 4

“Darya Plinere and Arkady Borisov” (2015-18) “Inventory Management

Improvement Case Study”, Journal of Information Technology and Management

Sciences, September 3–4-2015, p. 9. 157-166.

"Kamau Lucy Wangari" (2015) "Effects at the Organizational Competitiveness

Inventory Management Practice", International Procurement and Supply Chain

Management Academic Journal, Vol-1, No. 5, 72-98

"Ashraf Mohammad Salem Alrjoub" (2017) "Inventory Management, Capital Costs

and Corporate Performance", Journal Investment Management and Financial

Innovation, Volume 14, Number 3, Page 1. 4-14.

"Akhilesh Jayakumar" (2013) "Inventory Control Technology Analysis", International

Journal of Science and Research Publications, Vol. 3, No. 3.

"Baimei Yang" (2014) "Study on Optimal Strategy for Single-Stage Inventory

Management of Two Suppliers", Journal of the World of Science, Vol-14, Article #

417319, general five pages.

"Jose Roberto do Rego" (2011) "Spare elements inventory manage", literature

assessment. PROD. Vol-21, Issue-4, web page no.656-666

"Patrik Jonsson and Stig-Arne Mattsson" (2008) "Inventory Management Practice and

Its Effect on Perception Program Performance", Journal of International Production

Research, Vol-forty six(7), pp. 1787-1812.

"Handan Hal Ravinder" (2014) "ABC Analysis Inventory Management", Journal of

American Business Education, Vol. 7, No. 3.

"Linh N K Duong" (2015) "Multi-criteria Inventory Management System for

Perishable and Alternative Products", Procardia Manufacturing 2 (2015) 66-76.

"Jui-Chan Huang” (2017) "AIP Conference Proceedings, Vol-1836, Issue 1> 10.1063

/ 1.4981954" "Improved stock control and forecasting based totally on interest-based

totally class."

"Kevin J. Dooley (2010)" Inventory Management and Bullwhip Effect During the

2007-09 Recession, "Supply Chain Management Levels, Vol. Forty six, No. 1, 12-18.

"Kot S., Grondys K., Szopa R." (2011) "Inventory Theory of Inventory Management

Based on Demand Forecasting", Polish Journal of Management Studies, Vol. Three,

pp. 147-148.

"Nsikan John" (2015) "Inventory Management Practice and Operational

Performance," Journal of International Supply and Operations Management, Vol. 1,

No. Four, p. 392-406 pages.

"Elvira Marie B. Aske" (2009) "Consistent Inventory Control", Industrial

Engineering. Chemistry. Res., 2009, Vol. 48(24), pp 10892-10902.

Baldenius and Reichelstein (2000) “Examining Inventory Management from an

Incentive and Control Perspective, Vol. 2, pp. 245-256.

"Moon, Likyeong" (2001) "Stock Management and Production Planning and

Scheduling", Vol-3 Issue-five, one hundred twenty five-127.

WEBSITIES

http://www.mysoresanda.com

WWW.SHODGANGA.COM

OTHER SOURCES

Company Brochures

Company magazines

Company’s Balance sheet and Profit and Loss account

Official Reports and journals.

ANNEXURE

Profit and loss account as on 31-3-2013 to 31-3-2017

Particulars Amount in Rs

2013

Amount in Rs

2014

Amount in Rs

2015

Amount in Rs

2016

Amount in Rs

2017

Revenue

from operations

28,61,32,818 3,15,71,67,654 3,57,02,63,347 4,11,86,92,228 4,55,14,24,227

(-)Excise Duty 30,49,33,560 33,18,03,615 397,14,57,397 4511,22,681 499425579

Net Revenue from

operations

2557199258 2825363739 3178805980 3667569547 4051552130

Other Income 30640704 91550963 42014368 66185101 72539873

2587839962 2916914702 3220820347 3733754648 4124538521

Expense:

Cost of material

consumed

12,5,32,19,839 1,27,55,74,042 1604403610 1565420225 2336112863

Purchased of stock

in trade

43491858 31680271 19651109 28126768 27408943

Change in

inventory of

finished goods,

WIP & stock in

trade

(70568751) (12353006) (129211487) 91497342 (461808294)

Employee benefit

ex

445590312 493987163 4877220141 553741174 576036096

Finance cost - 31358 - - 823879

Depreciation 7341146 8062541 11688967 13824174 9582530

Other expenses 510435222 558161384 561953527 625711494 736598741

Total expenses 2189509615 2354143753 2555705866 3016685042

Profit before

exceptional

And extraordinary

items and tax

393830347 562770949 665114481 717069606

Provision for

taxation

Current tax 108328122 189636054 221002485 2395736787 293573687

Prior period tax 38356890 55330221 - 20600537 66941733

Deferred tax

liability

34225591 21749744 (7764455) (14109355) (14862385)

Profit or loss after

tax

217419744 328374699 451876451 471004737 471004737

EPS 683 1032 1420 1480 1719

Balance Sheet for the year ended 2013-2017

Particular Amount

(Rs) as at

31-3-2013

Amount (Rs)

as at

31-3-2014

Amount (Rs)

as at

31-3-2015

Amount (Rs)

as at

31-3-2016

Amount (Rs)

as at

31-3-2017

LIABILITIES

Shareholders fund 318221000 318221000 31822100 318221000 318221000

Reserves & surplus 686584676 954982316 1327419182 1723591979 21958598387

Revaluation of land 7758591370 7758591370 7785891370 775891370 7758591370

NON-CURRENT

LIABILITIES

Long-term borrowings 83506504 35000000 35000000 35000000 35000000

Other non-current liabilities 29118117 45898443 80980655 47836024 97525385

Long term provisions 260013594 256822474 263803932 287296043 277156830

CURRENT LIABILITIES

Short term borrowings - - - - -

Trade payables 29376509 49247570 41078706 79704737 38070798

Other current liabilities 163748690 314979855 357052094 354004874 382742711

Short term provisions 161272037 269215234 317376083 338224146 465763092

TOTAL 9490432497 10002938262 10494223022 10942470173 11568931023

ASSETS

Non-current assets

Fixed assets 7855306061 7852771403 7854703587 780164745 8036322785

Non-current investments 200000100 230000100 239600100 71729359 71729359

Deferred tax assets 19816230 30386255 38150710 52260065 67122450

Long term loans and

advances

107825720 175441070 38150710 291568365 256033090

Trade receivables 8112093 29649908 3012271189 16923848 15054017

CURRENT ASSETS

Inventories 496456170 808143158 1059669174 1053863184 1815626392

Trade receivables 210356224 232025566 203148049 252260569 227542169

Cash and cash equalents 431911843 437757488 575242123 1051439256 821869852

Short term loans and

provisions

160648056 206763314 204793970 272260782 329360168

Other current assets - - - - -

TOTAL 9490432497 10002938262 10494223022 10942470173 11568931023

A CHARY A

A CHARY A INSTITUTE OF TECHNOLOGY

DEPARTMENT OF MBA

INSTITUT ES INTERNSHIP WEEKLY REPORT (1AY16MBA54)

Name of the Student: RADHIKA MR

Internal Guide: Prof. MALLIKA B.K

USN No: 1AY16MBA54

Specialization: FINANCE AND HR

Title of the Project: A STUDY ON INVENTORY MANAGEMENT

Company Name: KARNATAKA SOAPS & DETERGENTS LIMITED

Company Address: #27 , Industrial Suburb, Bangalore-pune Highway,

Rajajinagar, Bangalore-560055.

External Internal Week Work undertaken Guide Guide

Signature Signature 1

Understanding structure, culture and In~ ~ Week functioning of the organization

2 Training period: understanding the financial

In~ Jr Week products and services of the company

3 Training period: Knowledge about the

T7~ }Y Week performance of the live stock market

4 Presentation of the research instrument Jld JV Week

5 Collecting the primary and secondary data

'T]c_J ~v Week required for the research

~

6 Data collection

lncl ttY Week

,. '

7

Week

8

Week

9

Week

10

Week

Analysis of data collected by various

statistical tools

Analysis interpret, findings, giving

conclusion, suggestions

Preparation of the final report

Submission of final report

r-n Company

Kamat2~:ge~a4 Detergent Limit a :i.-: .?..7, !ndustr!al Sub: rb,

f3eng;:tlur U··Pune Hi'" .. :':-:::, y, aJtnagar, BG!lg~i· · ..i ··560 05~